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WTO : Post-Seattle Progress and Prospects

Our 9 December 1999 Background Note dealt in some detail with the failure of the Seattle Ministerial. This note comments on subsequent action to put the WTO negotiations and work programme back on track.

Recapitulation

Thinking about the way ahead

The Next Phase

 

I. Recapitulation

1. Seeking to decant the lessons from past experience, the rummaging on the reasons for failure at Seattle continued in January and early February: the WTO Director General stated that "we tried to write too much into the draft declaration" and that Seattle "wasn’t ripe". Others mentioned the lack of time, as the real negotiations started only in the last two days of the Ministerial meeting. Similarly, much has also been made since of the malfunction of the process – the existing gap between "the ambitions of the WTO and its means" and the insufficient concern for full participation of all Members and transparency. Bearing these considerations in mind, efforts are being made to move ahead on a more certain road to tackling the unfinished business of how to proceed on the mandated negotiations of the built-in agenda, and how to deal with the implementation and "deadline" issues and, ultimately, to the launching of the new round.

2. For there to be progress, these "substantive" past failings should be addressed. In particular, all Members would have to show more flexibility on: the implementation issues (a major concern for developing countries) and on the new issues to be included in the agenda of the new round. It is interesting that the Director General has stated that "trade cannot exist in a vacuum and that therefore issues such as the environment are important". The "such as" is significant: clearly the labour standards issue is not going to go away.

3. There was confusion on the status of the Seattle Ministerial. The Chairpersons decision to suspend the conference was thought to carry no authority as there was no debate and no agreement. Ultimately this will not really be an issue because the status will be what the Members want it to be. If, as is likely, the Seattle Ministerial is allowed to fade away, drafting a new declaration for a new Ministerial Conference will, of course, have to start from scratch. However, it would be expedient to build on progress made on issues such as market access, trade facilitation and services.

II. Thinking about the way ahead

4. In the wake of the Seattle Ministerial the one issue on which there was universal agreement was that the next step was to rebuild confidence in the system.

5. The main scenarios foreseen in the interim period between the end of the Seattle Ministerial Conference and the 7-8 February General Council meeting to set the WTO work programme back on course were:

• to seek an early ministerial meeting with a view to a declaration on the lines of the draft being negotiated in Seattle;

• to take an incremental approach, with the emphasis being on the built-in agenda, the extension of deadlines and a review of the WTO structure and negotiating process, with a ministerial meeting being convened in the light of progress;

• to accept that the very broad and complex nature of WTO negotiations is such that the package approach – that the results of a negotiation should be treated as part of a single undertaking, with nothing being agreed until everything is agreed – is now no longer viable. This would point to a series of focused negotiations on selected issues.

6. To launch an early ministerial meeting, as was called for by the EU, a sine qua non condition would be careful preparatory negotiations at which the flexibility, necessary in all such negotiations, would have had to be demonstrated. In particular a sympathetic approach to the concerns of the developing countries in respect of labour and environmental issues would be essential and a meaningful development package agreed. Given the need to take urgent action, and the overriding consideration being to ensure that there was no further failure at this level, this was the least likely scenario.

7. The incremental approach seemed more attractive and feasible. Technically the mandated negotiations on the further liberalization of agriculture and services started on 1 January 2000, albeit no substantive meetings took place until the February 7-8 General Council meeting. The "essence" of the draft Seattle declaration could provide the broad guidelines for these negotiations. It is for the key players to take the initiative. Similarly, a realistic approach to the extension of the 31 December 1999 deadlines on TRIMS, TRIPS and customs valuation would help to create the right-atmosphere. However, problems arise from the prevailing two conflicting positions: on the one hand the view (mostly espoused by the Quad) that extensions should be considered on a case-by-case basis and, on the other, the stance of developing countries that extensions should be considered in a multilateral background and within the larger context of implementation issues. All these matters, together with a complete review of the WTO structure and negotiating process, would pave the way for the eventual holding of a successful ministerial meeting which will launch a new round, with a single undertaking.

III. The Next Phase

8. The re-thinking of positions took time, but a more positive approach from all members during informal consultations led to the General Council meeting of 7-8 February agreeing to measures that will put WTO work back on course. As was foreseeable, the incremental approach won the day.

9. Organisationally there is merit in phasing the negotiations, concentrating on the built-in agenda, mandated reviews and implemention. The limited number of officials in the smaller missions can thus concentrate on a narrower range of topics and therefore contribute more effectively to the process.

10. On the built-in agenda, it was decided that the mandated negotiations on agriculture and services would be held in the Committee on Agriculture and the Council for Trade in Services respectively. To keep them separate from the regular work of these bodies, negotiations will take place in special sessions scheduled back-to-back with the regular meetings, the first of which will be scheduled for 21 February in the case of the Services Council and 23-24 March for the Committee on Agriculture. Both the Committee on Agriculture as well as the Council for Trade in Services would report to the General Council on the negotiations. However, although the emphasis has been on jump-starting negotiations on agriculture and services, it is important to remember that the built-in agenda also covers other mandated negotiations, on certain aspects of TRIPS (geographical indications) and reviews and other work (on rules of origin, customs valuation, the Dispute Settlement Understanding, import licensing, sanitary and phytosanitary measures, safeguards, antidumping, etc.) which still need to be addressed.

11. Although the framework for negotiation was established, negotiating procedures and modalities were not agreed, including the appointment of chairmen of the relevant negotiating bodies.

12. Regarding the mandated reviews of the TRIPS and TRIMS Agreements, there was unanimous agreement among Members that the trade and developmental impact of their application thus far would be taken into account.

13. On the pressing issue for least-developed countries of reaching agreement on the bound duty-free and quota-free access for least-developed country exports, this is unlikely to fulfil LDC expectations because, realistically, it will never cover all LDC exports; there will always be exceptions for goods of pivotal interest to LDCs (specifically textiles and agriculture in certain industrial country markets). This is of course an old idea, first floated in the G-7 Lyon Summit in 1996 by the then WTO Director General, on which a formal agreement is yet to be reached.

14. As part of the incremental approach there should be an early implementation of the Action in favour of Least-Developed Countries, which should include a rigorous re-examination of the Integrated Framework for Trade-Related Technical Assistance, the need to improve the quality and delivery of technical assistance and the provision of significant funds to be able effectively to revamp capacity building for developing countries in general.

15. On a review of the WTO decision-making process, the EU and Japan have stated the objective as being "an appropriate balance between efficiency and transparency" and have suggested setting up an "advisory body of business leaders and experts under the Director-General" to examine all options. However, some Members are adamant that discussions on institutional reform should be limited to internal transparency (e.g. participation and information-sharing issues) and not transparency with regard to external organisations.

16. On the negotiating process in respect of ministerial meetings in particular it is thought that, given political will and careful preparation, the existing Committee of the Whole, supported by Working Groups and bilateral and plurilateral discussions, coordinated by the Green Room meetings, provides a sound basis. The problem, of course, is the selection of those to sit in the Green Room, it being impossible for all 136 Members to be present.

17. In general the "wake-up" call is being heeded. In particular the statements from the US, the EU and Japan all include reference to the importance of countering the "general dissatisfaction" among the developing countries, whose "support" is henceforth crucial.

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